Those that envy/hate Kim Kardashian for raking in $10,000 per tweet may soon be partaking in some schadenfreude. The reality TV star is being sued for an allegedly libelous tweet. And if she keeps up her habit of vaguely disclosing her sponsorships, the FTC will soon be slapping her with fines as well.

Kardashian is a member of the growing cadre of individuals who get paid by companies to tweet advertisements. Thanks to her large following of almost 2.8 million twtitterers, she’s also Twitter advertiser Ad.ly’s highest paid Tweeter. The company’s CEO Sean Rad says that she gets paid $10,000 per tweet. But Kardashian’s attempts to fit ads into 140 characters could open a can of worms when it comes to disclosure and proper attribution.

Most recently, the voluptuous celebutante got sued by the creator of something called The Cookie Diet. After the site linked to a post that claimed Kardashian was a fan of the diet, she took to her Twitter feed to rebut the rumor:

“Dr. Siegal’s cookie diet is falsely promoting that I’m on this diet.
NOT TRUE! I would never do this unhealthy diet! I do QuickTrim!”

“If this Dr. Siegal is lying about me being on this diet, what else are they lying about?”

The problem is that Kardashian is paid by QuickTrim to be a spokesperson (as proved by her
tweets
from a QuickTrim event today). And when Kardashian spoke
out against a competitor on Twitter for misrepresenting her, the
comments fell into the gray area between personal retribution and
criticizing a competitor.

And Matthew Siegal, the President & CEO of The Cookie Diet was not pleased. He’s suing her, saying:

“Kim Kardashian failed to say she is a paid endorser of QuickTrim. She
is in the public eye and when she makes a comment people hear it… She made a derogatory statement about our brand, and that negative
impact could cost us tens of millions of dollars.”

But the Cookie Diet snafu is not Kardashian’s only sponsored problem. She recently took to her blog to clarify her relationship with Carl’s Jr, whose ads she has appeared in:

“I want to clear this up because there has been
a lot of talk about this. Carl’s Jr did not pay me to tweet about their
salads. Yes, obviously I was paid to be in the commercial? we all have
to work! But I was not paid to tweet or talk about the salads on my
blog, Facebook account, MySpace account or any other online outlets.”

For someone who earns $10,000 per tweet, that is a major distinction. But for readers of her content, who are unclear when she is paid and when she is not, it all gets rather confusing.

Meanwhile, the Federal Trade Commision implemented new disclosure rules in 2009 that require all sponsored content to be clearly disclosed. That’s easier said than done, but some, like blogger Perez Hilton, account for this by adding “SPONSORED” before advertisement tweets.

Only one of Kardashian’s numerous tweets since December provided such disclosure — a December 29 tweet  directed from the Ad.ly network that ran with the parenthetical “(Ad).”

But Kardashian often does not make clear when she is being paid and when her tweets are simply her own opinion. As Reason points out:

“Thanks to new disclosure rules on paid Internet endorsements, those
undisclosed sponsors could get Kardashian in trouble
with the FTC, which could fine her
up to $11,000
per infringement.”

It’s easy for most viewers to discount all commentary from Kardashian as advertising. But that may not be enough to appease the FTC.

And many people don’t think that high priced tweet ads are worth the money. Anil Dash thinks that “nobody has a million Twitter followers.”
But there’s clearly a value to purchasing ads in a popular person’s
Twitter feed. Ad.ly charges between $1 and $10,000 per sponsored tweet,
depending on a Twitterer’s follower numbers. The rates work out to
about $1 to $3 to reach a thousand consumers. That rate is lower than
purchasing a standard display ad online.

As Barbarian Group CEO Rick Webb puts it on his blog:

“The long and the short of it is that by my math,
Kim Kardashian… is actually fairly reasonably priced. And a damn site
cheaper than paying $300k to Yahoo for a homepage takeover for one day.”

Luckily, companies looking to insert ads into Twitter are likely to figure out the details of paid tweets before it becomes an issue for the feds. For its part, Ad.ly is trying to be more
upfront.

According to AdAge:

Ad.ly, which connects participating Twitterers with advertisers, plans
to introduce an algorithm this month that will tie pricing for paid
tweets with the quality of each feed, considering factors such as
retweets and how much advertising the feed runs. “Advertisers have the
peace of mind knowing that they’re paying based on a performance value
of the publisher,” Mr. Rad said. “The Twitter ecosystem is happy
because everyone is incentivized not to spam and to have a great
quality stream.”

But Kardashian is on track to get herself into trouble personally by hedging the line between paid and personal
endorsements. And even the tendency away from spam could have a negative effect on Kim Kardashian’s bottom line. Ad.ly limits its publishers (like Kardashian) to one
paid post per day. Which means that for now, it may be that all the
other brands in Kardashian’s stream are getting into her feed for free. But the fact that a large quantity of her tweets sound like advertising anyway isn’t good for the longterm quality of her stream.